Investors plan to increase real assets allocation, research shows

Investors in the UK are gearing up to boost their allocations to real assets in the coming year, according to a study conducted by fund manager TIME Investments. 

The research, which surveyed 200 wealth managers, financial advisers, discretionary fund managers, fund selectors, and investment analysts, revealed that 76% of investors intend to increase their exposure to real estate and 74% to infrastructure over the next twelve months. 

This strategic move is driven by a positive outlook for macro conditions in 2024, suggesting potential benefits for those investing in real assets, while discounts for listed assets may continue to narrow.

The motivation behind this shift in investment strategy stems from various factors identified by the research.  67.5% of respondents expressed a desire to de-risk their portfolios through diversification, while 60.5% emphasised an increased focus on ESG considerations. 44.5% of investors cited a preference for secure income streams as a driver for their inclination towards real assets.

As per the research, 70% of advisers foresee a challenging economic climate and investment environment. Pessimism regarding the improvement of conditions persists, with the majority not anticipating positive changes for at least the next 12 months. 

Andrew Gill, fund manager of TIME: UK infrastructure income: “We have also seen a significant change in market conditions and expectations with UK inflation dropping materially. The UK economy may escape a technical recession, but in the very near term, most economic forecasters are expecting slow economic growth. With economic growth likely to remain subdued, sectors with robust and growing cash flows, such as real estate and infrastructure, are likely to outperform over the long term. Growing cash flows should also continue to fuel income and dividend increases in most real asset sectors.”

© 2024 funds europe

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